Try to minimize financial loss in the process which is what you did.You can still try to pursue him for damages.

For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

I'm inheriting a bigger mortgage that the tenants will cover just so I can have piece of mind that we don't have our money being wasted in finance fees.

I went to a seminar last night and asked the speaker what would she do in my situation and she said DO NOT waste my time with that property or in that city anymore.

I was hoping to purchase a couple of properties from my parents with the ultimate goal of minimizing tax burden for them. 

This house is around 700 sq/ft with a sagging roof, 1 interior wall separating this area with the kitchen, minimal floor joists, hardly any electrical and no plumbing.

I just think it's harder for some people to save up plus I want to minimize surprises such as tenant racking up huge bills or suspect water usage (We are in closing now where seller just found out tenant hasn't been paying water bill and it's $1300 and tenant SD is only $800).

Or toxic waste dumps.

With the appreciation, tax benefits, offset mortgage, etc. the upfront costs in undertaking a good sized project are minimal compared to what is possible 5,10,15 years down the line...Just something to keep in mind

So they'll be closing fees, but should be minimal.